Who hasn't borrowed from a friend or family in times of need? The concept of P2P or peer to peer lending is probably as old as money itself. But why is it attracting so much attention now?
Technology is fundamentally disrupting the long established business models of yesterday. Today, the largest cab company does not own a single cab (Uber), the largest hotel company does not own a single hotel room (Airbnb)...so it is conceivable that tomorrow, the largest lender may not own a dollar of deposits with them. It is all about connecting the demand with the supply at a large scale and technology is exactly the thing that is fueling this aggregation at a rapid pace. P2P lending marketplaces, which connect individual borrowers and lenders bypassing traditional financial institutions, are spearheading this disruption in the lending world. Globally, the P2P lending market is gaining traction and is expected to cross US$ 1 trillion by 2025. Leaders, such as Prosper and Lending Club, have originated loans worth US$ 9 billion so far.